CAVIRC.net - PANNON AUTOMOTIVE CLUSTER

PANNON AUTOMOTIVE CLUSTER (Hungary)

From the change of regime (1990) on, the inflow of foreign direct investment in Hungary has been great. This holds especially true for the West Pannon Region. Three multinational companies, namely Audi, Opel and Suzuki, chose this region as investment location. Relatively developed infrastructure and qualified but cheap human resources of the region explains why the automotive cluster initiative was launched there.?
That? attracted many automotive SMEs to settle down in the proximity of these multinationals. These SMEs wanted to become their suppliers. However, they soon had to realise that rivalry did not lead to success. Without co-operation, the majority of these SMEs could not hope for supplier status.

The primary objective of the cluster is to enable its members to become efficient suppliers of large integrator companies. But most of the Hungarian SMEs in the automotive industry do not dispose of those characteristics that could make them suppliers of multinational companies. Their capacities are limited, their added-value is low and they do not have the resources necessary to invest in R&D, to increase the complexity of products etc. In these circumstances, their only chance to grow or even to survive is through co-operation.
Therefore, Pannon Automotive Cluster aims at:

fostering the creation of co-operative networks of enterprises;
accelerating the establishment of new supplier links;
supporting investment projects to improve competitiveness; encouraging innovation;
encouraging foreign automotive ventures to settle down in the region.

The cluster was the common initiative of the three multinationals located in Hungary (Audi, Opel and Suzuki), some Hungarian automotive companies and the West Pannon Regional Development Agency (http://www.euregio.hu/english.html). The initiative was so successful that the Hungarian Ministry of Economics has decided to support it.

Pannon Automotive Cluster was established in December 2000. Prior to its establishment, a Hungarian research institute conducted a survey in the West Pannon Region. During the survey, 150 enterprises of the automotive sector were interviewed in order to find out what kind of cluster services they require.

Membership was open to every company/institution which had interest in the automotive industry. On the one hand, the diversity of institutions (manufacturers, service providers, banks, university, research institute etc) enhanced the quality of co-operation.
At the beginning the most urgent task of the cluster management was the recruitment of members. It was also important to get members understand what a cluster is and how they can benefit from it since the term 'cluster' was unknown in Hungary. Parallel to it, the cluster started building its own database containing information about the activity and technology of its members.
The cluster also developed a portal site http://www.autocluster.hu/, which is the primary information and communication platform of the members. The portal offers on-line registration (for potential members, visitors, interested parties etc.), on-line data management; it publishes automotive and business news as well as information on new projects, funding opportunities; it has professional fora (public, member and closed group fora); it offers electronic newsletter service.
The most frequently visited part of the portal is the database, where companies can browse the available data and information on their potential partners.

Apart from recruiting members from Hungary, the cluster management also recognised the need to co-operate with similar foreign clusters. The establishment of international co-operation network was thus a high profile issue already at the beginning. To build relationship, the cluster management participated at many supply chain events, conferences and workshops. It succeeded in building long-term relationship with Austrian automotive clusters (AC Ober?rreich and AC ViennaRegion clusters) as well as with the German AMZ supplier network. These acquintances have also led to cross-border business men meetings on company level.
The management also runs a benchmarking club for cluster members. In order to help cluster members keep pace with technology, management and supplier issues, the Pannon Automotive Cluster frequently organises events.
It has organised several trainings which helped them in acquiring up-to-date market knowledge and these training also taught how knowledge can be translated into competences necessary to survive in the supply chain.

In 18 January 2003, the Pannon Automotive Cluster had 62 members, including manufacturers, service providers, universities, banks etc. Through synergies, on the one hand members are able to increase their power in the supply chain. On the other hand, co-operation in the field of purchase, human resources, training etc. leads to cost effective solutions.
The development of the web site had positive impact on the frequency of ICT usage among cluster members. Since the web site is the primary tool for communication and co-operation, companies are encouraged to use ICTs on a daily basis. As a result, they are getting increasingly familiar with the benefits of ICTs.
The cluster has joined an Interreg III A and a Phare CBC project.